Ask Rick Christian: Money & Negotiation

This is our regular column of frequently (and not-so-frequently) asked questions with Alive’s Founder and CEO, Rick Christian. Over the weeks, we’ll cover everything from negotiation strategy and all things literary, lying, his manliest possession and most terrifying moment, his own ultimate demise…and everything in between!

What are the details of the financial arrangements you handle for authors?

Among an agent’s many jobs is ensuring that all marbles end up in the right bags. The specifics are clearly detailed in written agreements between author and agent, outlining the agreed upon split (with the agent getting 15% of all monies payable to the author); and author and publisher, reflecting the financial terms we negotiate on the author’s behalf. At the end of the day, an author’s marble count depends on their agent’s negotiation strength.

What impacts your negotiation ability?

It is always boosted by the power of an author’s words and things like prior acclaim and current platform. Having a strong agent who’s not afraid to swim with sharks is hugely beneficial. Having time to work the deal is always in the author’s favor. We can do better for an author if mortgage payments and taxes aren’t in arrears and there’s food in the pantry. It’s never good for an author to be anxious for a deal in the next week. We can move that quickly if necessary, but it can have a negative impact on the advance. As desperate as an author may be, it’s best not to let the publisher hear your stomach growl.

How are payments in the agreement typically doled out?

With major houses, typically in thirds: on execution of the agreement, delivery and acceptance of the manuscript, and publication. Some publishers pay in halves; others in fourths, with the final payment coinciding with paperback release or a year following initial publication. Once the advance is earned back, royalties typically pay between 10% and 15% of a book’s cover price. Payments are often routed through an agency, which will bank the money in an escrow account and forward the percentage due the author. We do things differently at Alive Communications. To get money to authors quickly (and avoid the temptation of sailing to Tahiti on their nickel), we specify that publishers send 85% of the advance and subsequent royalties straight to the author, and 15% to us. It keeps things simple and honest and fast.

I understand that your agency commission is 15%. Is that ever negotiable?

Everything is done at 15%. We’ve held to this standard consistently, citing value-added services like hands-on attention before, during, and after contract negotiation and execution. Also, the consistent presence of an author advocate all along the way on a host of issues is critical, often involving other projects for which we receive no income. Because we are committed to long-term support and career success, we don’t just make deals and disappear. We monitor publishers’ performance and lobby constantly for our clients, not simply to hold publishers accountable but also to help infuse creative ideas and spur action they might not otherwise have taken. And then there’s the need to stimulate cross-promo efforts between publishers when an author has active titles with several houses. This has been critical with the rise in sales of Karen Kingsbury, for example. When we spurred her various publishers to work in cooperation with each other, her first year sales jumped from less than 25,000 units a year to about 250,000 in less than four years.

So sales aren’t based just on the quality of writing?

Some writers get better with each book and you see an incremental increase in sales over the years. But in general, you’ll find there’s a really good agent attached to projects where there’s been a runaway increases in sales. That’s the difference an agent makes. It’s the agent who ensures the publisher is thinking and performing strategically for authors when vision and implementation get diffused across multiple people, departments, and years. It’s the agent who pushes marketing and sales teams to position and support books intelligently across all markets. It’s the agent who does the fine-tooth combing and negotiating of the contracts. That’s why good agents earn every dollar. I know there are agents who charge 10% and others who charge 20%. We’ve stuck to the middle ground from Day One and don’t spend a lot of time justifying it by knocking those whose fee structure is different than our own. When asked to justify our percentage, we cite all that I’ve mentioned, coupled with a gentle reminder that in this life you generally get what you pay for.

How long do you receive your commission on a particular project?

The commission continues for the life of the project, as do the benefits authors derive from our work on their behalf. If this weren’t the case, a client could decide on a whim they don’t like the way I do my hair or drink from a straw, and thereby change provisions to which we’d agreed.

What is the term of your agency agreement?

Most agencies have 2-5 year terms to protect themselves from termination, but I don’t believe in that. We can be fired at will. An author will know if we’re doing a great job from our first negotiation, but if things sour I don’t want us artificially bound by a period of time. Everything we do is about relationship and service. We’re superb at both, which is why our clients are extraordinarily loyal.